Genes involved in the determination and differentiation of segmental identity in Drosophila melanogaster have been identified by genetic interactions with the homeotic genes already known to be required. Many new genes required for transcriptional activation or repression of the homeotic genes have been identified. We have cloned and characterized one of the genes required for transcriptional repression. The new homeotic transcriptional repressor, Su(z)12, encodes a zinc-finger protein conserved between Drosophila, plants, and vertebrates. It is required both during embryogenesis and later in development to maintain repression of homeotic genes. We have also localized the verthandi transcriptional activator to the middle of the centric heterochromatin of one of the autosomes. We have also continued our genetic and developmental characterization of the brahma chromatin remodeling complex, which is also required for transcriptional activation of homeotic genes in Drosophila. We have identified cis-regulatory elements in two target genes and have been isolating mutations that specifically disrupt interactions of brahma with these two different target genes. We have also identified transcriptional regulatory elements in the Sex combs reduced homeotic gene that are involved in both cis-regulation and in regulatory interactions between genes on homologous chromosomes. The regulatory interactions between genes on homologous chromosomes result from transvection. The dominant effects of chromosome aberrations in this genomic region suggest that interactions between multiple silencing elements are important for the maintenance of transcriptional repression during development.